Marketing Conferences

In their responses to the annual Gartner CMO Spend Survey 2020-2021 — which polled 432 respondents in North America, France, Germany and the U.K. between March and May 2020 — marketing leaders reveal buoyant optimism.

Despite ongoing spending restrictions, CMOs remain upbeat. A sizable 73% of respondents expect the business and economic climate to have a positive impact over the next two years. More than half (57%) of respondents across all industries believe that performance will return to normal in the next 18 to 24 months — perhaps an overly optimistic expectation.

“An important part of the plan for recovery is understanding the environment and building plans aligned to the new economic, social and business realities that emerge over the next 18 to 24 months,” says Ewan McIntyre, VP Analyst, Gartner. Volatility and uncertainty will persist in the year ahead, so CMOs must focus on flexible and adaptive plans that take into account this instability and can respond quickly to market uncertainties.

The majority of CMOs believe in a quick and sharp (V-shaped) recovery, but not all their peers in the C-suite share this optimism. Despite this, an astonishing 73% of CMOs expect the negative impact of COVID-19 to be short-lived, with a positive outlook for business performance in the next 18 to 24 months. This optimism, however, is not shared by all members of the C-suite.

A Gartner poll reveals that nearly 60% of CFOs are building scenario plans that include a second wave of the pandemic. In addition, CFOs report a strong connection between COVID-19 and challenges with the macroenvironment, revenue loss and demand.

“Marketers remain stoic in the face of adversity and are significantly out of step with other members of the C-suite,” says McIntyre. “With many CEOs and CFOs planning for a U-shaped or W-shaped recovery, CMOs must be more vigilant in their cost optimization.”

Most CMOs (79%) expect to rely on their current customers to forge a path to recovery. Close to half (45%) plan to sell new products to an existing market, focusing on new product development through partnerships, product augmentation or R&D investments. Just over one-third (34%) are relying on selling existing products to existing markets to support growth.

But even this conservative strategy may require CMOs to consider bold tactics to implement it. Not all customers — even loyal ones — are equal. It’s critical for marketers to adopt value segmentation to focus on the most profitable customers and to build a balanced portfolio strategy that balances safer bets, such as servicing existing customers with more transformative options.

Despite tough economic times, marketers remain enthusiastic about technology. In 2020, technology spend will account for the largest proportion of marketing budgets compared with media, agencies and in-house labor. CMOs remain bullish about technology heading into the next 12 months, with 68% expecting their investments to increase. And given their renewed focus on customer retention, it’s not surprising that marketing leaders are least likely to cut customer data platforms, mobile marketing platforms and digital commerce, even if there is a downturn.

The use of digital channels intensified during the early months of the pandemic as consumers flocked online, and CMOs continue to guard digital budgets with particular care. They spend 22% of the marketing budget on digital advertising — including display, video or ads on platforms like Amazon — and paid search. Another 59% goes to owned and earned digital channels such as social marketing, the website, search engine optimization and mobile marketing. CMOs feel confident about the outlook for paid media in the coming 12 months: On average, 74% expect to increase spending on digital advertising and 66% on paid search.